A process requires an edge which is simply a statistical advantage you have over other players. A strong psychological state can be considered a bonus edge.
A COMPLETE BREAKDOWN OF MY MOMENTUM DAY TRADING PROCESS.
[THREAD]
A process requires an edge which is simply a statistical advantage you have over other players. A strong psychological state can be considered a bonus edge.
1) Knowledge and idea generation
2) Method and trade execution
3) Risk management and mindset
Each element is necessary and it builds a solid foundation in your trading process.
These factors make up the trading trinity.
In PM, I look for:
- Top gainers (40%+)
- Notable volume on gappers
- News or catalysts (to justify gap)
- Float (<50M)
- Market cap (<500M)
- Range (check daily)
- Price (<25)
- Stock personality (check daily)
- Filings (cash on hand and offering potential)
- https://t.co/dGrDjwtOR8
- https://t.co/Vc256oZCre
- https://t.co/AFrA2ebGr6
- https://t.co/N9nDmqz54E
- https://t.co/0aEt36amzx
- https://t.co/K5b5oercFQ
- https://t.co/VogPh4QNHM
- https://t.co/OoMHVH19CX
I hone in on my top 2.
Also, I have any names that have had momentum and held trend in the prior days as back burner watches since they may see continuation.
I want to identify:
- Prior ranges (since I believe stocks will trade in ranges until they breakout/down)
- Key levels from the daily
- PML and PMH
Also, I take note of the trend and the 50 and 200 SMA.
INDICATORS:
- 9 EMA = Red
- 20 EMA = Light Blue
- 50 SMA = Yellow
- 200 SMA = Green
- VWAP = Purple
- Volume Bars
TIME FRAMES:
- 5 Minute
- 1 Minute
- 1 Day
I prefer to dip buy most of the time because breakout trades require a certain market condition.
I try add as close to major key levels as possible for low risk/high reward.
When it comes down to a channel line or key level. I look to see if price respects that level for an entry with risk just beneath.
I don’t breakout add unless the market is hot. I would rather for a breakout and re-test and get my adds there.
I flick between the 1m and 5m and I mainly watch candle bodies.
Seasonal strategies are simply strategies that are high probability given the current market conditions.
*I go through and explain some strategies in my pinned tweet.
I constantly assess sentiment and I always ask myself: “Who’s in control and who’s stuck?”.
This helps me better understand the price action.
I love asymmetrical bets where risk/reward and probability is skewed heavily in my favor.
I have a max pain of 10% on a trade and I will risk <2.5% of my account on a trade.
You can calculate position size by:
Max risk / (Entry price - Stop price) = Position size
I believe these levels to be potential pivot points so I’m really strict at cutting my losses because if I carry on holding then price is likely to flush.
I don’t hold bags!
Either I will:
1) Scale most (50%+) on the first target and move my stop to entry
2) Let the stock work and only scale out small amounts (~10%) at key resistances and ride the trend based on the 20 EMA on the 5m
However, I take note of runners that remain strong and AH movers depending on their action and their close.
I will chart these names when market closes. I keep them on back burner watch the next day.
It’s what I find consistency, repeatability and profitability in.
It works for me but it may not work for you.
You can take this thread as a guideline and adapt it to fit your way of trading.
Ideally, I want an ADR% of 10+ because I’m interested in explosive momentum moves.
Also, you always want to keep an eye on volume. You don’t want volume to fall off a cliff for a trade you’re in.
Keep things simple and be able to do them time and time again with ease.
There’s no need to make things complex and sophisticated when they don’t need to be.
It’s better to have something straightforward where you just need to execute well.
In many ways, my strategy is inspired and derived from their own.
More from Tradingthread
1. Overview
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2. Investing Process
https://t.co/ZpJeN0JiSV
3. Tools I use and
4. Market Analysis https://t.co/Ol9POhXMiV
5. Due diligence and deep dives on stocks
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6. General
7. My ongoing
8. List of about 20+ email newsletters in investing / technology and self help that I would
9. I do a lot of writing about IPOs and like to research new companies.
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"Reading the Tape" / Level 2 / Time and
Thread on "Reading the Tape" / Level 2 / Time and Sales
— Ace (@LunarAces) May 29, 2021
EMAs /
No one explains EMAs either, so here are my 9/20 EMA rules. I have to give credit to @MullinsMomentum for introducing me to these. I adopted some stuff from him, and the rest I developed my own way of using them. Here's a thread of how I use them:
— Ace (@LunarAces) May 30, 2021
Supply and
Why and how 90% of retail traders lose and how you can join the 10% that win. This is by far the most important thread I've made. I truly hope this helps change your lives.
— Ace (@LunarAces) June 14, 2021
Position sizing, risk management and trading around your
Position sizing, risk management, and trading around your core thread:
— Ace (@LunarAces) June 28, 2021
https://t.co/7DjG8ElT7d
Trading Lessons for total beginners.
— making sales \uea00 (@making_sales) February 3, 2021
Thanks to @ripster47, @Brady_Atlas @MullinsMomentum, @SDHILLON97, @MrZackMorris, @PJ_Matlock, @notoriousalerts, @Hugh_Henne, @bear_fuker, @Trogdaddy, @atrhodes00 and many more for teaching me all that I know about the stocks.
[THREAD]
https://t.co/n4bAh3w1MC
If you\u2019re in the process of blowing up your account\u2026
— making sales \uea00 (@making_sales) February 26, 2021
STOP AND READ THIS NOW!
[THREAD]
https://t.co/jy7Ud7aAM1
Stop losses are your friend.
— making sales \uea00 (@making_sales) February 26, 2021
Stop losses help you to follow your rules and respect your plan.
Stop losses help keep the size of your losses minimal and recoverable.
Personally, I recommend using a hard stop loss (especially if you\u2019re new) instead of having a mental one.
https://t.co/227pi3f1cw
People often ask me what is meant by \u201chave your own plan.\u201d
— making sales \uea00 (@making_sales) March 7, 2021
What does a plan consist of and how do you go about creating one?
That\u2019s what I\u2019m here to discuss\u2026
[THREAD]
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Here's how I'd measure the health of any tech company:
— Jeff Atwood (@codinghorror) October 25, 2018
How long, as measured from the inception of idea to the modified software arriving in the user's hands, does it take to roll out a *1 word copy change* in your primary product?
Hiring efficiency:
How long does it take, measured from initial expression of interest through offer of employment signed, for a typical candidate cold inbounding to the company?
What is the *theoretical minimum* for *any* candidate?
How long does it take, as a developer newly hired at the company:
* To get a fully credentialed machine issued to you
* To get a fully functional development environment on that machine which could push code to production immediately
* To solo ship one material quanta of work
How long does it take, from first idea floated to "It's on the Internet", to create a piece of marketing collateral.
(For bonus points: break down by ambitiousness / form factor.)
How many people have to say yes to do something which is clearly worth doing which costs $5,000 / $15,000 / $250,000 and has never been done before.